Bank Outrage

Investors are well aware that money markets pay next to nothing in interest these days. Now one bank has announced a policy to actually charge clients a fee to hold their cash. The policy by Bank of New York Mellon Corp. will apply to some large depositors to hold their cash, reports the Wall Street Journal.

In a letter reviewed by WSJ, Mellon advised that it will charge 0.13% plus an additional fee if the one-month Treasury yield dips below zero on depositors that have accounts with an average monthly balance of $50 million “per client relationship.”

“In the past month, we have seen a growing level of deposits on our balance sheet from clients seeking a safe-haven in light of the global interest rate and credit environment,” the bank told the Journal in an emailed statement.

All of us become weary of the incessant pleas for funding. However, I am sick and tired of being “sick and tired” of the Banksters, the funding of their casinos, the ever increasing subjugation to the banks and Wall Street.

How about you?

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The entire series of efforts to rescue the banking system were so flawed, partly because those who were somewhat responsible for the mess–as advocates of deregulation, as failed regulators, or as investment bankers–were put in charge of the repair. Perhaps not surprisingly, they all employed the same logic that had gotten the financial sector into trouble to get it out of it. The financial sector had engaged in highly leveraged, non-transparent transactions, many off balance sheet; it had believed that one could create value by moving assets around and repackaging them. The approach to getting the country out of the mess was based on the same “principles.” Toxic assets were shifted from banks to the government–but that didn’t make them any less toxic. Off-balance sheet and non-transparent guarantees became a regular feature of the Treasury, Federal Deposit Insurance Corporation, and Federal Reserve. High leverage (open and hidden) became a feature of public institutions as well as private.

Worse still were the implications for governance. The Constitution gives Congress the power to control spending. But the Federal Reserve was undertaking actions knowing full well that if the collateral that it was taking on proved bad, the taxpayer would bail it out. Whether the actions were legal or not is not the issue: they were a deliberate attempt to circumvent…

The Huffington Post urges readers to move their savings and checking accounts out of Citibank, JP Morgan Chase, and Bank of America, and into smaller, independent banks. I think it’s an inspired idea:

America’s Main Street community banks — the vast majority of which avoided the banquet of greed and corruption that created the toxic economic swamp we are still fighting to get ourselves out of — are struggling.

Why don’t we take our money out of these big banks and put them into community banks? What would happen if lots of people around America decided to do the same thing?